Reaction on CSU funding shifts range from dismay to dismissive

Students walk and ride their way down the middle of the historical Oval on the Colorado State University campus in Fort Collins. (Photo/Jason Kosena)

Copyright 2008, The Colorado Independent

Lawmakers and state officials reacted with a range of surprise, support, and dismay in response to The Colorado Independent’s findings that, in the five years that Larry Penley has been at the helm of Colorado State University (CSU), he has poured money into the administrative and athletics departments, and shifted millions of dollars away from academics and the library system.

The changes — including a tripling of the budget for the office of the president — are part of what officials say are efforts to help the university attract additional revenue and funding in an era when they are unable to rely solely on state tax dollars to fund its operations. The upshot, however, is that CSU has increased student fees and tuition while money is poured into administrative programs as well as an extensive PR campaign to compete for research grants and students. The shifts have also resulted in larger class sizes for undergraduates and fewer courses being taught by tenured professors.

On Monday, lawmakers unanimously expressed surprise over TCI’s findings; however they differed on exactly what they mean for the state’s higher education system and Colorado taxpayers.

John Kefalas

“I was not fully aware of the magnitude of funding shifts towards CSU administration,” said Rep. John Kefalas, a Democrat from Fort Collins. “The fact that undergraduate academic funding has not kept pace with these particular funding priorities is a matter of state concern.”

In Colorado, accountability of higher education is decentralized and left in the hands of an institution’s governing board.

In the case of CSU, the board of governors, or a volunteer group of political appointees selected by the governor, approve university budgets and long-term planning goals based largely on input given by Penley and other university officials. By design, the Legislature and the state’s Department of Higher Education (DHE) do not read the fine print detailing the university’s budget and operations, said David Skaggs, executive director of the Colorado DHE.

“Each of the institutions have boards that have been recognized with ‘enterprise status,’ which has led to a highly decentralized governance system of higher education in the state,” said Skaggs, who spoke on behalf of Gov. Bill Ritter.

“We receive very broad reports from each school about how they have used their money, but we do not have the oversight or the authority or the capacity to oversee the budget of each institution.”

Skaggs said the College Opportunity Fund, legislation developed in 2004 to help better fund the state’s universities, requires the Department of Higher Education to hold each university to a set of benchmarks that have to be met by 2010. Those agreements have fiscal dimensions, he said, but don’t get down to the specifics about how universities are budgeting their state funding. Specifics are instead monitored by the CSU board of governors, which meet formally less than a dozen times each year.

Messages with Doug Jones, the chair of the CSU board, were not returned on Monday.

Into the dark

That lack of specifics has led to a system where state lawmakers, who allocate hundreds of millions in state funds to CSU each year, are largely unaware of what becomes of the money after it leaves state coffers. Lawmakers on Monday were careful to reserve judgment on the findings until learning more, but some, including Rep. Kefalas, called for closer scrutiny.

“I have requested a response from CSU administrators, faculty, classified employees and students (because) improving academic instruction should always be our No. 1 priority, especially when public funds are involved,” said Kefalas, who has carried many CSU-driven bills through the Legislature in recent years. “I applaud the accomplishments of Dr. Penley and his team because he thinks outside of the box, but we must ensure balance and true shared responsibility for the sake of our students and our community and to preserve the public trust.”

Former high school teacher and Fort Collins Democratic Sen. Bob Bacon shared Kefalas’ concerns and said maintaining the best undergraduate education experience at CSU should be a top priority. But Bacon also said he can’t blame the university for trying to secure new revenue sources while working in a system that under-funds higher education in Colorado by as much as $800 million a year.

Bob Bacon

“Being an old teacher, I want to make sure that the best situation is available for undergraduate classes,” said Bacon, who chairs the Senate Education Committee. “I decry that we have increased class sizes at CSU and that so many are being taught by [teaching assistants], but I would say CSU is still in better shape than many institutions including the state’s community colleges.

“I think you are raising a good question, though, in asking if the libraries and the academic programs are getting their fair share of the funding that is coming from the state,” Bacon said. “I am at the point of being interested in asking more questions about the amount of financial aid that is being offered amid higher tuition and fees than making any assumptions about what appears to be troubling on the surface.”

Public universities going private?

Not every lawmaker found TCI’s findings of concern, however. Loveland Republican Rep. Don Marostica, a CSU graduate and active member of the university’s alumni association, said alternative efforts by Colorado universities to gain additional revenues should be applauded. He also said university operations are so complex and specialized the state should focus on finding the right people to lead the institutions instead of micromanaging them.

“Once the [legislative joint budget committee] allocates money to the different higher education institutions, I think the president of the colleges are hired to use that money in the best way that they see fit, and as the boss, I think they should be able to run their organization the best way they can,” said Marostica. Universities, he added, should fund themselves in full accord with enterprise ventures similar to what CSU has been working to achieve through its re-prioritization of state funding.

Don Marostica

“I know my take is probably different than the others, but I think once that [tax] money is released to the university, I want each one to be autonomous, and each one knows what their institution needs and how to best spend the money. In that sense, it’s like running a business,” Marostica said. “My internal gut tells me they can run the universities as enterprises and still make higher education affordable.”

Colorado’s public university presidents are working with hundreds of millions in taxpayer dollars, however, and thus aren’t able to work under the same guidelines as a private business owner. And although the state’s Department of Higher Education has performance contracts that work in very broad terms, CDHE executive director Skaggs said state officials are working to narrow that focus, which will ultimately incorporate greater accountability for universities.

“One of the revised components of the revision will get at providing and holding a measure of accountability aimed at ensuring that administrative costs are held down at our state schools so we can know that money is being spent on instruction,” said Skaggs. That standard can be difficult to measure, he noted, because some administrative funding is funneled down for academic use.

In addition, the state has also begun to look at the issue of student fees, which are approved by a university’s governing board, Skaggs said. At CSU this year, those student fees totaled nearly $1,400.

“The JBC last year took note of what has been happening in the student fee side of things and as a department we are in the process of concluding a study about what has been happening with student fees in the last few years,” Skaggs said. “I think that is one area that is very appropriately getting some scrutiny from the Legislature and others.”